by Tanada » Sun 26 Feb 2017, 22:45:08
This was posted over on the defense of all things ETP thread but greatly deserves your attention. Ugo Bardi does a take down of the faulty concepts that form the foundation of the ETP model of oil production.
$this->bbcode_second_pass_quote('donstewart', 'U')go Bardi
Takes a swing at the Hill's Group. Catastrophism is wrong.
http://cassandralegacy.blogspot.comDon Stewart
$this->bbcode_second_pass_quote('Ugo Bardi', '[')size=150]Catastrophism is popular, but not necessarily right. Debunking the "Hill's Group" analysis of the future of the oil industry[/size]
Catastrophism is popular. I can see that with the "Cassandra's Legacy" blog. Every time I publish something that says that we are all going to die and the world to end, it gets many more hits than when I publish posts arguing that we can do something to avoid the incoming disaster. The latest confirmation of this trend came from three posts by Louis Arnoux that I published here last summer (link to the first one). All three are in the list of the ten most successful posts ever published here.
Arnoux argues that the main problem that we have today is the result of the diminishing energy yield (or net energy, or EROI) of fossil fuels. This is a correct approach, but Arnoux bases his case on the results of the calculations reported by an organization called "The Hill's Group", a rather obscure entity that claims to be able to predict the future of oil production on the basis of a mathematical treatment based on the evaluation of the entropy of the extraction process. And they sell their report for US $28 (shipping included).
Neither Arnoux nor the "Hill's Group" are the first to argue that diminishing EROEI is at the basis of most of our troubles. But the Hill's report gained a considerable popularity and it has been favorably commented on many blogs and Web sites. It is t is understandable: the report has an aura of scientific correctness that comes from its use of basic thermodynamic principles and of the concept of entropy, correctly understood as the force behind the depletion problem. There is just a small problem: the report is badly flawed.
When I published Arnoux's posts on this blog, I thought they were qualitatively correct, and I still think they are. But I didn't have the time to look at the Hill's report in detail. Now, some smart people did and their results show the many fundamental flaws of the treatment. You can read the result in English by Seppo Korpela (write to me to get a copy, ugo.bardi(thingything)unifi.it) and in Spanish by Carlos De Castro and Antonio Turiel.
Entropy is a complex subject and delving into the Hill's report and the criticism to it requires a certain effort. I won't go into details, here. Let me just say that it simply makes no sense to start from the textbook definition of entropy to calculate the net energy of crude oil. The approximations made by the report are so large to make the whole treatment useless (to say nothing of the errors it contains). Using the textbook definition of entropy to analyze oil production is like using quantum mechanics to design a plane. It is true that all the electrons in a plane have to obey Schroedinger's equation, but that's not the way engineers design planes.
Of course, the problem of diminishing EROEI exists and the way to study it is based on the "life cycle analysis" (LCA) of the process. This method takes into account entropy indirectly, in terms of heat losses, without attempting the impossible task of calculating it from first principles. By means of this method, we can see that, at present, oil production still provides a reasonable energy return on investment (EROEI) as you can read, for instance, in a recent paper by Brandt et al.
But if producing oil is still predictable, why is the oil industry in such dire troubles? (see this post on the SRSrocco report, for instance). Well, let me cite a post by Nate Hagens:
In the last 10 years the global credit market has grown at 12% per year allowing GDP growth of only 3.5% and increasing global crude oil production less than 1% annually. We're so used to running on various treadmills that the landscape doesn't look all too scary. But since 2008, despite energies fundamental role in economic growth, it is access to credit that is supporting our economies, in a surreal, permanent, Faustian bargain sort of way. As long as interest rates (govt borrowing costs) are low and market participants accept it, this can go on for quite a long time, all the while burning through the next higher cost tranche of extractable carbon fuel in turn getting reduced benefits from the "Trade" creating other societal pressures.
Society runs on energy, but thinks it runs on money. In such a scenario, there will be some paradoxical results from the end of cheap (to extract) oil. Instead of higher prices, the global economy will first lose the ability to continue to service both the principal and the interest on the large amounts of newly created money/debt, and we will then probably first face deflation. Under this scenario, the casualty will not be higher and higher prices to consumers that most in peak oil community expect, but rather the high and medium cost producers gradually going out of business due to market prices significantly below extraction costs. Peak oil will come about from the high cost tranches of production gradually disappearing.
I don't expect the government takeover of the credit mechanism to stop, but if it does, both oil production and oil prices will be quite a bit lower. In the long run it's all about the energy. For the foreseeable future, it's mostly about the creditIn the end, it is simply dumb to think that the system will automatically collapse when and because the net energy of the oil production process becomes negative (or the EROEI smaller than one). No, it will crash much earlier because of factors correlated to the control system that we call "the economy". It is a behavior typical of complex adaptative systems that are never understandable in terms of mere energy return considerations.
The final consideration of this post would simply be to avoid losing time with the Hill's report. But there remains a big problem: a report that claims to be based on thermodynamics and uses resounding words such as "entropy" plays into the human tendency of believing what one wants to believe. And catastrophism is popular for various reasons, some perfectly good. One is that we are really risking various kinds of catastrophes in the near future as the result of both climate change and mineral depletion. Unfortunately, stunts such as the one by Hill&Arnoux end up being (correctly) debunked and they put in a bad light all the people who are seriously trying to alert the public of the risks ahead.
And so, what can we do? Reality is one, but both cornucopianism and catastrophism are human reactions to it. We can find a middle way between these extremes and keep going.